US visa reforms: IBM's stance may benefit Indian IT

The outplacement clause imposes significant higher filing fees on H1-B dependent employers based on the percentage of non-immigrants employed in the company.

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NEW DELHI: In what may be seen as a positive development for the Indian IT sector, tech-giant IBM has backed the House version of the US Immigration Bill, reported ET Now. The House version, unlike the Senate version does not have the outplacement clause, which was being viewed as detrimental for the Indian IT sector.

Under the Senate proposed US Immigration Bill, the outplacement clause does not allow IT companies to deploy more than a certain percentage of their employees onsite. This in turn would have forced IT companies to change their business model. According to ET Now, IBM has written a letter to the House Judiciary Committee expressing and offering their support for the Bill.

IBM had earlier supported the outplacement clause, reported the channel. In its note JP Morgan has cited two possible reasons for a change in stance by IBM namely; the Indian government putting on hold the preferred market policy and a backlash which the company faced from its own clients.

According to ET Now, JP Morgan in a note has said that the development is a positive one, which might imply that the final version of the Immigration Bill is unlikely to have harmful clauses.

The outplacement clause restricts the placement of H-1B workers at client sites. The outplacement clause imposes significant higher filing fees on H-1B dependent employers based on the percentage of non-immigrants employed in the company. These companies currently pay $2,500 for H1-B visa processing and an additional $1,225 for premium processing.

The bill's clause will force Indian IT companies to reduce their dependency on H-1B workers, given that it may require them to fork out higher visa fee and salaries to H-1B visa holders over their American peers with similar experience.

JP Morgan feels that Indian IT companies should localize their US hiring more, advertise their hiring efforts a lot more, establish recognition in US colleges and, perhaps invest individually and collectively (as an industry) in showing themselves to be good citizens in the US.